Alberta deficit set to triple: Redford government overestimated oil royalties revenue

Four months into its mandate, the Redford government made a startling revelation. In his first quarterly update, Finance Minister Doug Horner announced that Alberta could be headed for a $2.3 to $3 billion deficit. Horner blamed a shaky global economy and weakened oil prices and oil and gas revenues. Low land lease sales to producers was mentioned as another factor.

Horner promised that he would keep the province on track for a surplus for the fiscal year 2013-14. The Progressive Conservative Party passed a budget prior to the election this spring it counted on almost $100 a barrel of oil for its royalty calculastions.

Opposition parties, at the time, said that the forecast was too optimistic and this has proven to be true in the first quarter. The Alberta budget, passed prior to the election, contained many goodies for those that supported Alison Redford. The details of the budget are availbable on the Government of Alberta website.

In essence Alberta projected $40.1 Billion in Revenue and estimated $41.1 Billion in expenses, with a deficit of $886 Million.

One of the major criticisms during the spring election was the Progressive Conservative party's willingness to dip into the Alberta sustainability fund. That fund was pegged at $3.7 Billion and is used to cover budget deficits.

In essence, Alberta has three choices:

• Dip into the sustainability fund: or
• Raise Taxes
• Cut programs

This is probably not the whole story on Alberta revenues and deficits. The province has recently declared a few protected areas in the Alberta Oil Sands, which will result in millions being claimed by oilsands developers, who already had the leases for these areas.

Scott Hennig, Alberta Director of the Canadian Taxpayer's Association, said the Alberta government is breaking the law, by not releasing finanical information required by the Accountability Act.

Hennig said that the Finance Minister is hiding information that has been provided by his predecessors for two decades.

“The government is hiding information,” Hennig said. “For 19 years the government has provided this information, and yesterday they did not. Why? Why is this information all of the sudden secret?

“When government decides to start hiding things, Albertans should be concerned.”

Government Accountability

There have been several revelations of financial abuse by government bureaucrats. A specific example were the expense claims by members of the Alberta Health Services Superboard. There have also been questions on Premier Alison Redford's travel. For example there was the recent visit to London during the Olympics, her attendance at the secret Bilderberg conference and of course trips to Washington, DC and Chicago to sell the oilsands.

Obviously Redford was not selling the oilsands to either the Obama Administration or Democrats in Congress. Did she go to convince the republicans?

The opposition parties are holding the Redford government's feet to the fire. Albertans need a full accounting of government expenditures. The days of secretive government perks are over.

While the Wildrose Party, the official opposition, called it "Alison in Wonderland Accounting," the Liberals called it a "fudget budget."

"Alberta’s ministers have now been asked to review capital spending, examining each program’s intent and cost. Mr. Horner wants departments to save at least $500-million combined.

“We are not going to cut for the sake of cutting,” he said. “We are tightening our belts.

“We will cap overall operating spending to budget allocations and we have asked departments to operate lower than budget.”

There will be no new money for public sector negotiations, he continued. The government will not impose new taxes or make “drastic cutbacks” or affect day-to-day services. Spending cuts haven’t been ruled out.

Opposition parties, which all described Premier Alison Redford’s original budget as too spendthrift and too optimistic, were quick to say they were right.

The Wildrose Party, the official opposition in Alberta, described it as “Alison Wonderland” accounting.

“We’re in a situation where we’re going to see a massive return to debt or severe cuts in social spending and infrastructure,” said Wildrose finance critic Rob Anderson, “It’s a sad story.” Globe and Mail